U.S. retirement system rated C-plus; policymakers can upgrade to A grade.

(SeaPRwire) –   Millions of Americans lack sufficient retirement savings — and millions more are unsure how to begin. Following President Trump’s recent mention of Australia’s retirement system as a possible model for the U.S., there’s a rare surge in momentum for reform. Policymakers need to act on this opportunity.

Take a young person starting their first job now. Thanks to recent laws, they’ll probably be automatically signed up for a 401(k) right away — a genuine step forward. But looking ahead decades: that same worker might have switched six employers, ended up with a mess of small accounts, and still grapple with the question plaguing millions of Americans: Will this be enough?

This scenario is becoming more common. Longer life expectancies, less straightforward career paths, higher living costs, and tighter government budgets are reshaping the very definition of retirement security. The 2019 SECURE Act and its 2022 follow-up made real strides — yet gaps remain in longevity protection, savings sufficiency, and access. Since 401(k) and 403(b) plans are now the foundation of retirement for most Americans, the need for more extensive reform is critical.

The Mercer CFA Institute Global Pension Index — which evaluates retirement systems in over 50 markets based on adequacy, sustainability, and integrity — highlights the issue clearly. The U.S. performs strongly in integrity but consistently falls short in adequacy and sustainability — areas where reform could deliver the quickest results.

The outcome: the U.S. is mid-ranked globally, while nations like Australia top the list. Without reform, more Americans could face retirement with insufficient income — or no way to access the savings they have.

Where reform is needed most

1. Turn savings into income that lasts

Saving is only half the battle. The tougher part is turning a 401(k) balance into steady income that won’t deplete. All too often, workers switch jobs and cash out small accounts instead of rolling them over — permanently reducing their retirement savings.

As the U.S. population over 60 is expected to double by 2050, the risk of outliving savings is real. Streamlined rollover procedures and clearer information would help workers keep their savings intact — and plan for a retirement that could last three decades.

2. Close the coverage gaps

Retirement savings in the U.S. are still highly unequal. Younger workers, part-timers, and caregivers are the most neglected — and many have no idea if they’re on the right path.

Three focused solutions could narrow this gap significantly: automatic reenrollment for workers who previously opted out; expanding coverage to those under 21 (building on the SECURE Act’s part-timer expansion); and special catch-up contributions for caregivers who take temporary workforce breaks. Combined, these changes would widen access and support the workers most at risk of falling behind.

3. Modernize investments — and reduce legal risk

In 2025, the President issued an executive order telling regulators to loosen limits on private market investments in 401(k) plans — mirroring Australia’s long-standing practice. Letting savers invest in private equity, venture capital, and digital assets could enhance diversification and returns. However, many employers are holding off until there’s clear guidance on fiduciary protections, liquidity, and fees.

Permitting 403(b) plans — which cover millions of government and nonprofit employees — to invest in collective investment trusts (as 401(k) plans already do) would cut costs and expand access for a frequently underserved group of workers.

Legal risk is also a growing barrier. Employer-sponsored plans have seen a spike in lawsuits lately, and policymakers should look for targeted ways to discourage baseless claims while preserving the right to file valid ones.

Pensions still matter

While most new retirement savings go into 401(k)s and 403(b)s, a large portion of existing retirement wealth is still in traditional defined benefit (DB) pensions. Modernizing the system doesn’t mean discarding what’s effective.

Reducing Pension Benefit Guaranty Corporation (PBGC) premiums would incentivize employers to continue offering DB plans. More flexibility in using surplus DB assets could also help both workers and plan sponsors.

Policymakers should also back DB plan designs that lower financial volatility for sponsors — like pooled employer plans, which would make it simpler for smaller organizations to offer a pension in the first place.

The bottom line

Better retirement policy isn’t about earning a global rank. It’s about making sure future generations can retire with dignity — even as careers become less predictable and lives grow longer.

The reforms laid out here — expanding lifetime income options, closing coverage gaps, updating investment rules, reducing legal risk, and strengthening pension protections — would make the U.S. system more resilient and equitable. The opportunity to act is here. Policymakers shouldn’t let it pass.